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Types of Employee Benefits

There are two types of employee benefits:

  • Those the employer must provide by law; and
  • Those the employer offers as an option to compensate their employees.

Examples of required benefits include Social Security and workers’ compensation, while optional benefits include health care and retirement. Both required and optional benefits have both legal and tax implications for the employer.

Employee Benefits Legal Compliance

While employers largely have discretion to choose what benefits to offer their employees, and how, employee benefits are also highly regulated by law.

  • Family and medical leave and continuation of health coverage¬†must be provided to employees by law.
  • Health coverage and retirement plans, while optional, are both governed by the federal Employee Retirement Income Security Act (ERISA). Health insurance is further subject to a variety of other federal laws, including the Affordable Care Act (Health Care Reform), and state laws that add to or expand federal law.